Calls for KIUC Cost Cutting

SUBHEAD: Continued calls for KIUC cost cutting instead of a rate hike approval. by Brad Parsons on 5 September 2009 in Aloha Analytics - http://alohaanalytics.blogspot.com/2009/09/letters-calling-for-kiuc-cost-cutting.html image above: proposed new logo for KIUC proposed by Juan Wilson.

There has been a steady stream of good letters to the editor of The Garden Island news about KIUC since the Aug. 25th Rate Hike PUC Hearing. I'll point out "KIUC’s unnecessary expenses" by Francine Grace from Sept. 4th, "Time for a plan" by Monroe Richman from Sept. 2nd, and "Power from the sun" by Kawika Moke from Aug. 28th. Each one of them makes great points and together are right on it. In the case of "Power from the sun" by Kawika Moke here is an article about how to actualize the idea that Mr. Moke envisions. From the article:

"Two years ago the city of Berkeley figured out an easy financing trick to get around this problem — the city itself just issues a bond to pay for the upfront costs of installing the solar panels, and the homeowner then repays the government over the course of 20 years via a small line item on the property-tax bill. (This way, if the home is sold, the costs of the panels get passed on to the new owner getting the benefits.)

It's a small policy tweak, but quite sensible. No mandates, no regulations, just offering homeowners an extra option if they choose. So it's not surprising to hear that, as Kate Galbraith reports today, the idea's been proliferating like crazy: This year alone, eight states have followed California's lead by giving their municipalities permission for this sort of financing, including Colorado, New Mexico, Ohio, Oklahoma, Texas, Vermont, Virginia, Wisconsin." In "Time for a plan" Monroe Richman makes the following key points, "...So where do we go from here? I have heard nothing from the CEO of KIUC as to methods of financing change other than the current rate increase to maintain the status quo...Whether it is wind power or sun power or nuclear power, a dependence on fossil fuel will only mean future rate hikes far beyond what you can visualize now." It is true. All KIUC filings with the PUC and Board Minutes show that other alternatives were not fully evaluated with due diligence other than just a rate increase. By recent case history before the PUC, this should be of particular importance to the Commissioners. But furthermore, Mr. Richman's closing point is oh so true; from the PUC docket in this case, "The EMP incorporates and projects the need for additional rate increases and rate cases in 2012 and 2015." (KIUC 10-T-200, 32:3-4) The most obvious alternatives to the proposed 10.5% revenue rate increase that were not thoroughly evaluated with proper due diligence are the many cost cutting measures that KIUC could undertake internally to make up most if not all of the difference. In fact, in the current economic environment, cost cutting measures are the more obvious alternatives that should be considered over a rate increase. Which leads us to the letter today "KIUC’s unnecessary expenses" by Francine Grace. Mrs. Grace first starts off with a generous remark towards KIUC, but quickly focuses in on a few specific cost cutting measures: member rebates deducted from bills or direct deposited to save on mail and postage; cutting the hardcopy and mailing of the KIUC Current magazine and posting it online only; and cutting the non-electricity related giveaways at KIUC meetings. Mrs. Grace concludes, "...When times are hard and finances are tight, any household or business would consider any unnecessary expenses and cut them out. Maybe KIUC should first look a little deeper and cut out any unnecessary expenses, before requesting a rate hike of its already cash strapped members..." In oral testimony to the PUC on Aug. 25th, others mentioned additional cost cutting measures that KIUC could pursue. David Ward mentioned the "33% electricity discount rate" that KIUC employees may receive. That is inconsistent with what KIUC is asking of its members and creates a sheltered environment from which energy decisions are made at KIUC. A related question has also come up, "Do KIUC Board Members also get that electricity discount rate?" Additionally, at the hearing, Judie H. Lundborg also mentioned the excessive air conditioning that KIUC runs in the luxury offices that they lease, "Too damn cold," I think were her appropo words. But maybe the best testimony I have seen on cost cutting measures that KIUC could pursue as a matter of new found due diligence to negate any perceived need for a rate increase was the following testimony submitted by Robert Goldberg and family via e-mail on Aug. 27th after the hearing and is now a part of the docket: "Aloha PUC and Consumer Advocate: We strongly oppose KIUC's requested rate hike. Instead, KIUC should cut wasteful spending: 1. KIUC rents the most luxurious, expensive commercial building on Kaua'i. Their convenient excuse is that they're stuck with a prior lease. If true (which we doubt), they should assign the lease and rent a much cheaper space. 2. KIUC publishes and mails a glossy magazine (Currents) that [almost] nobody reads. 3. KIUC hosts an extravagant annual meeting with food, entertairmient, rides, prizes, etc. They should hold a no-frills business meeting in a [modest] conference room. 4. KIUC mails rebate checks (separate from bills). They should simply credit the customers' accounts, thus avoiding a huge amount of administrative time and overhead. 5. KIUC's charitable contributions, sports sponsorships and political/lobbying activities [in D.C.] should be zeroed out. 6. Enormous waste in terms of salaries, benefits, travel, conferences, food, entertainment and [excessively fuel inefficient Executive] vehicles. We're in a deep recession, and consumers are suffering. All fuel increases are absorbed into the giant Energy Adjustment on every bill. There is no conceivable basis for any rate hike. Mahalo. Robert Goldberg [et. al.]" Could not have said it any better. Mahalo to all for your letters and oral and written testimonies. The oral and written testimonies should be good enough to influence the PUC Commissioners and Consumer Advocate on this. Marriott's representative has recently added some further filings to the docket...Marriott's response to KIUC's filed Opposition to Marriott's rep. request to intervene in the case. A hearing is set for September 14th as to whether they will be allowed to intervene in the rate case. Any other intervenors had 10 days from August 25th to file a request to intervene. The only filers to intervene so far on the docket are the Navy/PMRF and the Kaua'i Marriott's representative. Kauaians for a Bright Energy Future has decided not to try to intervene, but we will be following the case closely and writing about it throughout.